Sure, there might be a lender out there willing to give you such a mortgage, but you’ll be charged accordingly. And by that I mean you won’t receive the ultra low interest rate you saw on TV. And for good reason!

To compensate for all that risk, which is proven over time via default rate data, lenders need to collect more interest.

As I’ve mentioned before, this is kind of strange because the riskiest borrowers end up with the highest interest rates, which makes their monthly payments even higher and perhaps less manageable.

Little Down? You Might Be Stuck with a 30-Year Fixed Mortgage

Because low-down payment mortgages are inherently risky

And ARMs are also riskier than fixed mortgages

Lenders are shying away from offering that combination

Especially since they allow low credit scores to boot

If you’re a risky borrower, your borrowing options may be limited. In other words, you might only be able to take out a certain type of loan, such as a fixed-rate mortgage.